Agriculture Crop Insurance Policies in India – A Study on Pradhan Manthri Fasal Bima Yojana (PMFBY) in Telangana State

Authors: Dr. Masani Srinivasulu

DOI: https://doi.org/10.17605/OSF.IO/RC396

Short DOI: https://doi.org/ggnq8v

Country: India

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Abstract: India is the seventh largest country in geographical level and second largest country in population wise and twelfth largest country in economic wise. More than 70% of the population has their livelihood as agriculture and agriculture oriented works either directly or indirectly for their living. Over 600 million farmers are involved in agriculture related activities. Mahatma Gandhi said "Indian economy lives in rural villages", and many of the industries get their raw material from agriculture sector. Agricultural production therefore is inherently a risky business and farmers face a variety of weather, pest, disease, input supply and market related risks. Crop insurance programme whether for an advanced or a developing country, cannot be designed without scarifying some of the preceding rigid requirements. The government is relieved from large expenditures incurred for writing-off agricultural loans, providing relief and distress loans etc., in the case of crop failure. The Policy resolution than describe in detail the strategy and policy alternatives which are grouped under the following heads: Sustainable agriculture, Food and nutrition security, Generation and transfer of technology, Inputs management, Incentive for agriculture, Investment in agriculture, Institutional structure and Risk management. In January earlier this year, in a move aimed at reducing the recurrence of agricultural distress without having to effect hefty hikes in the Minimum Support Prices (MSP), Narendra Modi led National Democratic Alliance government had announced a crop insurance scheme named Pradhan Mantri Fasal Bima Yojana (PMFBY). Under the new scheme being implemented from Kharif season of 2016, the premium paid by farmers had been reduced to 2% of the insured value for the more rain-dependent kharif crop and 1.5% for the rabi season, compared with 3.5-8% charged for the two earlier schemes National Agricultural Insurance Scheme (NAIS) and Modified National Agricultural Insurance Scheme (MNAIS). In the case of horticultural crops, farmers’ premium burden will be 5% of the sum assured or 50% of the total premium. Under the PMFBY, there would be no upper limit on government subsidy provided by centre and state governments. “Even if the balance premium (after farmers’ contribution) is 90%, it will be borne by the government”.

Keywords: Agriculture, Crop Insurance, farmers, investment, PMFBY, risk

Paper Id: 278

Published On: 2015-09-24

Published In: Volume 3, Issue 5, September-October 2015

Cite This: Agriculture Crop Insurance Policies in India – A Study on Pradhan Manthri Fasal Bima Yojana (PMFBY) in Telangana State - Dr. Masani Srinivasulu - IJIRMPS Volume 3, Issue 5, September-October 2015. DOI 10.17605/OSF.IO/RC396

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